[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2307 Introduced in Senate (IS)]







108th CONGRESS
  2d Session
                                S. 2307

 To amend the Federal Food, Drug, and Cosmetic Act with respect to the 
importation of prescription drugs by importers, and by individuals for 
                 personal use, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 8, 2004

 Mr. Grassley introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Federal Food, Drug, and Cosmetic Act with respect to the 
importation of prescription drugs by importers, and by individuals for 
                 personal use, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Reliable Entry for Medicines at 
Everyday Discounts through Importation with Effective Safeguards Act of 
2004''.

SEC. 2. REPEAL OF CERTAIN SECTION REGARDING IMPORTATION OF PRESCRIPTION 
              DRUGS.

    Chapter VIII of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
381 et seq.), as amended by section 1121(a) of Public Law 108-173 (117 
Stat. 2464), is amended by striking section 804.

SEC. 3. IMPORTATION OF PRESCRIPTION DRUGS; WAIVER OF CERTAIN IMPORT 
              RESTRICTIONS.

    (a) In General.--Chapter VIII of the Federal Food, Drug, and 
Cosmetic Act, as amended by section 2 of this Act, is amended by 
inserting after section 803 the following section:

``SEC. 804. WAIVERS REGARDING COMMERCIAL AND PERSONAL IMPORTATION OF 
              PRESCRIPTION DRUGS; REGISTERED FOREIGN EXPORTERS.

    ``(a) Waivers.--
            ``(1) In general.--The Secretary shall in accordance with 
        this section provide by regulation that, in the case of 
        qualifying drugs imported or offered for import into the United 
        States from registered exporters--
                    ``(A) the limitation on importation that is 
                established in section 801(d)(1) is waived; and
                    ``(B) the standards referred to in section 801(a) 
                regarding admission of the drugs are subject to 
                subsection (g) of this section (including with respect 
                to qualifying drugs to which section 801(d)(1) does not 
                apply).
            ``(2) Importers.--A qualifying drug may not be imported 
        under paragraph (1) unless--
                    ``(A) the drug is imported by an importer and the 
                importation is in accordance with subsection (h); or
                    ``(B) the drug is imported by an individual for 
                personal use or for the use of a family member of the 
                individual (rather than for resale), and the 
                importation is in accordance with subsection (i).
            ``(3) Rule of construction.--This section has legal effect 
        only with respect to a drug that is imported or offered for 
        import into the United States from a registered exporter.
            ``(4) Definitions.--
                    ``(A) Importer.--The term `importer' means a 
                pharmacist or wholesaler.
                    ``(B) Permitted country.--
                            ``(i) In general.--For purposes of this 
                        section, the term `permitted country' means--
                                    ``(I) Canada;
                                    ``(II) 180 days after the date of 
                                publication of the report under clause 
                                (ii)--
                                            ``(aa) Australia;
                                            ``(bb) a member country of 
                                        the European Union or the 
                                        European Free Trade 
                                        Association;
                                            ``(cc) Japan; and
                                            ``(dd) New Zealand; and
                                    ``(III) any country designated as a 
                                permitted country under clause (iii).
                            ``(ii) Report.--
                                    ``(I) In general.--Not later than 
                                18 months after the date of enactment 
                                of this section, the Secretary shall 
                                submit to Congress a report subject to 
                                subclauses (II) and (III).
                                    ``(II) Contents of report.--The 
                                report under subclause (I) shall--
                                            ``(aa) describe the impact 
                                        of the drug importation system 
                                        established under this section 
                                        on--

                                                    ``(AA) the safety 
                                                and integrity of the 
                                                Nation's prescription 
                                                drug distribution 
                                                system;

                                                    ``(BB) the 
                                                prevalence of 
                                                counterfeit, 
                                                adulterated, or 
                                                misbranded drugs in the 
                                                United States; and

                                                    ``(CC) patient drug 
                                                therapy;

                                            ``(bb) describe the 
                                        potential impact of expanding 
                                        the system to allow importation 
                                        from additional countries; and
                                            ``(cc) include proposed 
                                        legislation to improve the 
                                        safety, efficiency, and 
                                        efficacy of the drug 
                                        reimportation system;
                                    ``(III) Consultation with the 
                                federal trade commission.--The 
                                Secretary, in consultation with the 
                                Chairman of the Federal Trade 
                                Commission, shall include in the report 
                                under subclause (I)--
                                            ``(aa) an evaluation of the 
                                        extent to which this section 
                                        advances the objective of 
                                        introducing lower-priced 
                                        competition in the United 
                                        States market for prescription 
                                        drugs; and
                                            ``(bb) recommendations for 
                                        improving the operation and 
                                        effectiveness of this section 
                                        to meet that objective.
                            ``(iii) Additional countries.--The 
                        Secretary may designate an additional country 
                        as a permitted country if the country meets the 
                        requirements of section 802(b)(1)(B) as that 
                        section relates to drugs.
                    ``(C) Pharmacist.--The term `pharmacist' means a 
                person licensed by a State to practice pharmacy, 
                including the dispensing and selling of prescription 
                drugs.
                    ``(D) Registered exporter.--For purposes of this 
                section:
                            ``(i) the term `registered exporter' means 
                        an exporter for which a registration under 
                        subsection (b) has been approved and is in 
                        effect.
                            ``(ii) the term `registration condition' 
                        means a condition for a registration under 
                        subsection (b) to be approved.
                    ``(E) Qualifying drug.--For purposes of this 
                section, the term `qualifying drug' means a covered 
                prescription drug, other than any of the following:
                            ``(i) A controlled substance, as defined in 
                        section 102 of the Controlled Substances Act.
                            ``(ii) A biological product, as defined in 
                        section 351 of the Public Health Service Act.
                            ``(iii) An infused drug, including a 
                        peritoneal dialysis solution.
                            ``(iv) An intravenously injected drug.
                            ``(v) A drug that is inhaled during 
                        surgery.
                    ``(F) Wholesaler.--
                            ``(i) In general.--The term `wholesaler' 
                        means a person licensed as a wholesaler or 
                        distributor of prescription drugs in the United 
                        States under section 503(e)(2)(A).
                            ``(ii) Exclusion.--The term `wholesaler' 
                        does not include a person authorized to import 
                        drugs under section 801(d)(1).
                    ``(G) Other definitions.--For purposes of this 
                section:
                            ``(i) The term `covered prescription drug' 
                        means an approved drug under section 505(b)(1) 
                        that is subject to section 503(b)(1).
                            ``(ii) The term `exporter' means a person 
                        who is in the business of exporting a drug to 
                        the United States or who, pursuant to 
                        submitting a registration under subsection (b), 
                        seeks to be in such business.
    ``(b) Registration of Foreign Exporters.--
            ``(1) In general.--A registration condition is that the 
        exporter involved submits to the Secretary a registration 
        containing the following:
                    ``(A) The name of the exporter and an 
                identification of all places of business of the 
                exporter that relate to qualifying drugs, including 
                each warehouse or other facility owned or controlled 
                by, or operated for, the exporter.
                    ``(B) Such information as the Secretary determines 
                to be necessary to demonstrate that the exporter is in 
                compliance with registration conditions under 
                subsections (c), (d), (e), (f), and (g) (relating to 
                the sources of exported drugs; the monitoring of 
                foreign facilities and the marking of compliant 
                shipments; the payment of fees; being licensed as a 
                pharmacy (in the case of importation by individuals); 
                and compliance with the standards referred to in 
                section 801(a)).
                    ``(C) An agreement by the exporter that the 
                exporter will not under subsection (a) export any drug 
                that is not a qualifying drug.
                    ``(D) An agreement by the exporter that a 
                qualifying drug will not under subsection (a) be 
                exported to any person not authorized pursuant to 
                subsection (a)(2) to be an importer of such drug.
                    ``(E) An agreement by the exporter that the 
                exporter submits to the jurisdiction of the courts of 
                the United States for the purpose of adjudication of 
                any action arising out of the activities of the 
                exporter under this section with the name and address 
                of an agent in the United States for service of 
                process.
                    ``(F) An agreement by the exporter to ensure and 
                monitor compliance with each registration condition, to 
                promptly correct any noncompliance with such a 
                condition, and to promptly report to the Secretary any 
                such noncompliance.
                    ``(G) A plan describing the manner in which the 
                exporter will comply with the agreement under 
                subparagraph (F).
                    ``(H) An agreement by the exporter to notify the 
                Secretary of--
                            ``(i) any change that the exporter intends 
                        to make regarding information provided under 
                        subparagraph (A) or (B); and
                            ``(ii) any change that the exporter intends 
                        to make in the compliance plan under 
                        subparagraph (G).
                    ``(I) Such other provisions as the Secretary may 
                require to protect the public health while permitting 
                the importation of qualifying drugs under subsection 
                (a).
            ``(2) Approval or disapproval of registration.--
                    ``(A) In general.--Not later than 90 days after the 
                date on which an exporter submits to the Secretary a 
                registration under paragraph (1), the Secretary shall 
                notify the exporter whether the registration is 
                approved or is disapproved. The Secretary shall 
                disapprove a registration if there is reason to believe 
                that the exporter is not in compliance with one or more 
                registration conditions, and shall notify the exporter 
                of such reason. In the case of a disapproved 
                registration, the Secretary shall subsequently notify 
                the exporter that the registration is approved if the 
                Secretary determines that the exporter is in compliance 
                with such conditions.
                    ``(B) Changes in registration information.--Not 
                later than 30 days after receiving a notice under 
                paragraph (1)(G) from a registered exporter, the 
                Secretary shall determine whether the change involved 
                affects the approval of the registration of the 
                exporter under paragraph (1), and shall inform the 
                exporter of the determination.
            ``(3) Publication of contact information for registered 
        exporters.--Through the Internet site of the Food and Drug 
        Administration, the Secretary shall make available to the 
        public a list of registered exporters, including contact 
        information for the exporters. Such list shall be posted on 
such site in a manner that will assist the public in readily obtaining 
the list. Promptly after the approval of a registration submitted under 
paragraph (1), the Secretary shall update the site accordingly, 
including, if requested by the exporter, providing a link to an 
Internet site of the exporter.
            ``(4) Suspension and termination.--
                    ``(A) Suspension.--With respect to the 
                effectiveness of a registration submitted under 
                paragraph (1) by an exporter:
                            ``(i) Subject to clause (ii), if the 
                        Secretary determines, after notice and 
                        opportunity for a hearing, that the exporter 
                        has failed to maintain substantial compliance 
                        with all registration conditions, the Secretary 
                        may suspend the registration.
                            ``(ii) If the Secretary determines that, 
                        under color of the registration, the exporter 
                        has exported a drug that is not a qualifying 
                        drug, or a drug that does not meet the criteria 
                        under subsection (g)(2)(A), or has exported a 
                        qualifying drug to an individual in violation 
                        of subsection (i)(1)(E), the Secretary shall 
                        immediately suspend the registration. A 
                        suspension under the preceding sentence is not 
                        subject to the provision by the Secretary of 
                        prior notice, and the Secretary shall provide 
                        to the exporter involved an opportunity for a 
                        hearing not later than 10 days after the date 
                        on which the registration is suspended.
                            ``(iii) The Secretary may reinstate the 
                        registration, whether suspended under clause 
                        (i) or (ii), if the Secretary determines that 
                        the exporter has demonstrated that further 
                        violations of registration conditions will not 
                        occur.
                    ``(B) Termination.--The Secretary, after notice and 
                opportunity for a hearing, may terminate the 
                registration under paragraph (1) of an exporter if the 
                Secretary determines that the exporter has engaged in a 
                pattern or practice of violating one or more 
                registration conditions, or if on one or more occasions 
                the Secretary has under subparagraph (A)(ii) suspended 
                the registration of the exporter. The Secretary may 
                make the termination permanent, or for a fixed period 
                of not less than one year. During the period in which 
                the registration is terminated, any registration 
                submitted under paragraph (1) by the exporter or a 
                person who is a partner in the export enterprise or a 
                principal officer in such enterprise, and any 
                registration prepared with the assistance of the 
                exporter or such a person, has no legal effect under 
                this section.
    ``(c) Sources of Exported Qualifying Drugs.--A registration 
condition is that the exporter involved agrees that a qualifying drug 
will under subsection (a) be exported to the United States only if, as 
verified by the Secretary under subsection (d)(3)(A), there is 
compliance with the following:
            ``(1) The drug was manufactured in an establishment 
        required to register under subsection (h) or (i) of section 
        510.
            ``(2) The establishment is located in the United States or 
        in any foreign country, and the establishment manufactured the 
        drug for distribution in the United States and for distribution 
        in one or more foreign countries specified in paragraph (4) 
        (without regard to whether in addition the drug was 
        manufactured for distribution in foreign countries not so 
        specified).
            ``(3) The exporter obtained the drug--
                    ``(A) directly from the establishment; or
                    ``(B) directly from an entity that, by contract 
                with the exporter--
                            ``(i) provides to the exporter a statement 
                        (in such form and containing such information 
                        as the Secretary may require) that, for the 
                        chain of custody from the establishment, 
                        identifies each prior sale, purchase, or trade 
                        of the drug (including the date of the 
                        transaction and the names and addresses of all 
                        parties to the transaction);
                            ``(ii) agrees to permit the Secretary to 
                        inspect such statements and related records to 
                        determine their accuracy;
                            ``(iii) agrees, with respect to the 
                        qualifying drugs involved, to permit the 
                        Secretary to inspect warehouses and other 
                        facilities of the entity for purposes of 
                        determining whether the facilities are in 
                        compliance with any standards under this Act 
                        that are applicable to facilities of that type 
                        in any of the States; and
                            ``(iv) has ensured, through such 
                        contractual relationships as may be necessary, 
                        that the Secretary has the same authorities 
                        regarding other parties in the chain of custody 
                        from the establishment that the Secretary has 
                        under clauses (ii) and (iii) regarding such 
                        entity.
            ``(4) The foreign country from which the exporter will 
        export the drug is a permitted country.
            ``(5) During any period in which the drug was not in the 
        control of the manufacturer of the drug, the drug did not enter 
        any country that is not a permitted country.
    ``(d) Monitoring of Facilities; Marking of Shipments.--
            ``(1) Monitoring of facilities.--A registration condition 
        is that, for the purpose of assisting the Secretary in 
        determining whether the exporter involved is in compliance with 
        all other registration conditions--
                    ``(A) the exporter agrees to permit the Secretary--
                            ``(i) to conduct onsite monitoring, on a 
                        day-to-day basis, of places of business of the 
                        exporter that relate to qualifying drugs, 
                        including each warehouse or other facility 
                        owned or controlled by, or operated for, the 
                        exporter;
                            ``(ii) to have access, on a day-to-day 
                        basis, to records of the exporter that relate 
                        to the export of such drugs, including 
                        financial records;
                            ``(iii) to carry out the duties described 
                        in paragraph (3); and
                            ``(iv) to carry out any other functions 
                        determined by the Secretary to be necessary 
                        regarding the compliance of the exporter; and
                    ``(B) the Secretary, with the permission of the 
                exporter, has assigned one or more employees of the 
                Secretary to carry out the functions described in this 
                subsection for the Secretary--
                            ``(i) on a day-to-day basis on the premises 
                        of places of businesses referred to in 
                        subparagraph (A)(i), and such an assignment 
                        remains in effect on a continuous basis; or
                            ``(ii) on a periodic basis on the premises 
                        of places of businesses referred to in 
                        subparagraph (A)(i), if the Secretary 
                        determines that the exporter has a sufficient 
                        history of compliance with the registration 
                        conditions.
            ``(2) Marking of compliant shipments.--A registration 
        condition is that the exporter involved agrees to affix to each 
        shipping container of qualifying drugs exported under 
        subsection (a) such markings as the Secretary determines to be 
        necessary to identify the shipment as being in compliance with 
        all registration conditions. Markings under the preceding 
        sentence--
                    ``(A) shall be designed to prevent affixation of 
                the markings to any shipping container that is not 
                authorized to bear the markings; and
                    ``(B) may include anti-counterfeiting or track-and-
                trace technologies.
            ``(3) Certain duties.--Duties of the Secretary under 
        paragraphs (1) and (2) regarding an exporter include the 
        following:
                    ``(A) Verifying the chain of custody of each 
                qualifying drug from the manufacturer of the drug to 
                the exporter.
                    ``(B) If one or more qualifying drugs are exported 
                to individuals under subsection (a)(2)(B), randomly 
                selecting samples of such exports for the purpose of 
                determining whether the drugs are being imported by the 
                individuals in accordance with the conditions under 
                subsection (i). Such sampling shall be conducted in a 
                manner that will result in a statistically significant 
                determination of compliance with all such conditions.
                    ``(C) Monitoring the affixing of markings under 
                paragraph (2).
    ``(e) Fees.--
            ``(1) In general.--A registration condition is that the 
        exporter involved pays to the Secretary in accordance with this 
        subsection a fee on a semiannual basis, with the first fee due 
        on the date on which the exporter first submits a registration 
        under subsection (b).
            ``(2) Amount of fee.--
                    ``(A) Aggregate total of fees.--The Secretary shall 
                ensure that the aggregate total of fees collected under 
                paragraph (1) for a fiscal year from all exporters is 
                sufficient to pay the costs of administering this 
                section for a fiscal year, including monitoring foreign 
                facilities under subsection (d); developing, 
                implementing, and maintaining under such subsection a 
                system to mark shipments to indicate compliance with 
                all registration conditions; and conducting under such 
                subsection inspections within the United States to 
                determine compliance with conditions under subsections 
                (h) and (i); except that, during the 12-month period 
                beginning on the date of the promulgation of the 
                interim final rule for implementing this section, the 
                Secretary may collect a lesser aggregate total of fees, 
                taking into account the number of registered exporters 
                and the capacity of such exporters as a group to pay 
                such administrative costs.
                    ``(B) Individual exporter fee.--Subject to the 
                exception described in subparagraph (A), a fee under 
                paragraph (1) for an exporter shall be an amount that 
                is a reasonable estimate by the Secretary of the 
                semiannual pro rata share of the exporter of the costs 
                referred to in subparagraph (A). Such pro rata share 
                shall take into account the number of employees that 
                the Secretary has under subsection (d)(1)(B) assigned 
                to the exporter.
            ``(3) Use of fees.--Subject to appropriations Acts, fees 
        collected by the Secretary under paragraph (1) are available to 
        the Secretary for paying the costs referred to in paragraph 
        (2)(A).
    ``(f) Licensing as a Pharmacy.--A registration condition is that 
the exporter involved agrees that a qualifying drug will under 
subsection (a)(2)(B) be exported to an individual only if the Secretary 
has determined that--
            ``(1) (A) the exporter is authorized under foreign law to 
        dispense drugs that are only safe for use under the supervision 
        of a practitioner authorized by law to administer such drugs; 
        and
            ``(B) the foreign country that issued such authorization 
        for the exporter did so under a regulatory program that, with 
        respect to the training of persons who dispense such drugs but 
        do not administer the drugs, protects the public health in a 
        manner comparable to programs of the States that regulate 
        pharmacists; or
            ``(2) in any case in which the exporter does not meet the 
        condition described in paragraph (1), the exporter employs a 
        sufficient number of individuals that are licensed as a 
        pharmacist under the law of one of the States, and the exporter 
        assigns to such pharmacist responsibility for dispensing 
        qualifying drugs under subsection (a)(2)(B).
    ``(g) Compliance With Section 801(a).--
            ``(1) In general.--A registration condition is that each 
        qualifying drug exported under subsection (a) by the exporter 
involved is in compliance with the standards referred to in section 
801(a) regarding admission of the drug into the United States, subject 
to paragraphs (2) and (3) and subsection (j).
            ``(2) Approval status.--
                    ``(A) Importation.--Subject to subparagraphs (C) 
                and (D), a drug may, in accordance with the other 
                subsections of this section, be imported into the 
                United States if the following criteria are met:
                            ``(i) The Secretary has with respect to the 
                        drug verified compliance with subsection (c), 
                        including verifying that the drug is approved 
                        for commercial distribution in a foreign 
                        country specified in paragraph (4) of such 
                        subsection, and that the establishment that 
                        manufactured the drug also manufactures the 
                        drug for distribution in the United States 
                        (referred to in this paragraph as a `U.S. label 
                        drug').
                            ``(ii) As compared to the U.S. label drug, 
                        the drug has the same active ingredient or 
                        ingredients, route of administration, dosage 
                        form, and strength, according to information 
                        provided by the labeling of the drug.
                    ``(B) Petition by manufacturer; general 
                provisions.--
                            ``(i) In general.--A person who 
                        manufactures a drug imported under subsection 
                        (a) may in accordance with this paragraph file 
                        with the Secretary a petition that requests the 
                        Secretary to order that importation of the drug 
                        under such subsection cease. Such a petition 
                        may be accepted for filing only if the petition 
                        claims that the drug is changed from the U.S. 
                        label drug and the change would require the 
                        submission of a supplemental application if 
                        made to the U.S. label drug, and only if the 
                        petition claims that--
                                    ``(I) the change could, under 
                                section 314.70 of title 21, Code of 
                                Federal Regulations, be made before the 
                                approval of such application; or
                                    ``(II) (aa) the change could not, 
                                under such section 314.70, be made 
                                before the approval of such 
                                application; and
                                    ``(bb) the change raises a 
                                bioequivalence consideration described 
                                in subparagraph (E)(i).
                            ``(ii) Certifications.--The Secretary may 
                        not accept a petition under clause (i) for 
                        filing unless the chief executive officer, the 
                        chief legal counsel, and the chief medical 
                        officer of the manufacturer involved each 
                        certifies in the petition that the information 
                        provided in the petition is complete and true.
                            ``(iii) Certain claims.--With respect to a 
                        drug being imported under subsection (a) for 
                        which a claim is made in a petition under 
                        clause (i) (referred to in this paragraph as a 
                        `petition drug'), the Secretary may not accept 
                        the petition for filing under clause (i) if the 
                        Secretary determines that any of the changes 
                        from the U.S. label drug described in the 
                        petition is--
                                    ``(I) a variation provided for in 
                                the approved application under section 
                                505(b)(1) for the U.S. label drug; or
                                    ``(II) a change for which, under 
                                section 314.70 of title 21, Code of 
                                Federal Regulations, a supplemental 
                                application would not be required.
                            ``(iv) Fee.--The Secretary may not accept a 
                        petition under clause (i) for filing unless the 
                        person submitting the petition pays to the 
                        Secretary a fee in the same amount as would 
                        apply if the person were paying a fee pursuant 
                        to section 736(a)(1)(A)(ii), except that the 
                        fee may not be required for a petition that, 
                        under clause (i)(II)(bb), makes a 
                        nonequivalence claim (as defined in 
                        subparagraph (E)(i)). Subject to appropriations 
                        Acts, fees collected by the Secretary under the 
                        preceding sentence are available to the 
                        Secretary for paying the costs referred to in 
                        subsection (e)(2)(A).
                            ``(v) Review by secretary.--The Secretary 
                        shall grant or deny a petition under clause (i) 
                        not later than 180 days after the date on which 
                        the petition is filed.
                    ``(C) Petition; drug changes not requiring prior 
                approval.--In the case of a petition under subparagraph 
                (B)(i)(I):
                            ``(i) During the period in which the 
                        petition is being reviewed by the Secretary, 
                        the authority under subsection (a) to import 
                        the petition drug involved continues in effect, 
                        subject to clause (ii).
                            ``(ii) Such authority is, during such 
                        period, subject to the condition that--
                                    ``(I) any importer importing the 
                                petition drug under subsection 
                                (a)(2)(A) inform individuals to whom 
                                the importer sells or dispenses the 
                                drug that the manufacturer is making a 
                                claim that the drug is different than 
                                the U.S. label drug; and
                                    ``(II) the registered exporter 
                                involved notify any individuals 
                                importing the petition drug from the 
                                exporter under subsection (a)(2)(B) 
                                that the manufacturer is making such a 
                                claim.
                            ``(iii) If the Secretary determines that 
                        the supplemental application referred to in 
                        subparagraph (C)(i)(I) regarding the U.S. label 
                        drug would not be approved, the Secretary shall 
                        grant the petition and order that importation 
of the petition drug under subsection (a) cease.
                    ``(D) Petition; drug changes requiring prior 
                approval.--
                            ``(i) Bioequivalence considerations.--For 
                        purposes of subparagraph (B)(i)(II)(bb), a 
                        claim that a change in a petition drug raises a 
                        bioequivalence consideration is a claim that--
                                    ``(I) the change creates the 
                                possibility that such drug is not 
                                bioequivalent to the U.S. label drug 
                                (in this paragraph referred to as a 
                                `possible- nonequivalence claim'); or
                                    ``(II) the petition drug is not 
                                bioequivalent to the U.S. label drug 
                                (referred to in this paragraph as a 
                                `nonequivalence claim').
                            ``(ii) Information regarding foreign 
                        government.--The Secretary may not accept a 
                        petition for filing under subparagraph (B)(i) 
                        that makes a possible-nonequivalence claim or a 
                        nonequivalence claim unless the following 
                        conditions are met with respect to the foreign 
                        country that approved the petition drug for 
                        commercial distribution:
                                    ``(I) The person filing the 
                                petition submits with the petition 
                                information demonstrating that the 
                                person has notified the government of 
                                the foreign country in writing that the 
                                person is submitting to the Secretary a 
                                claim under clause (i), which notice 
                                describes the claim.
                                    ``(II) Such person submits with the 
                                petition the information the person 
                                submitted to the government of the 
                                foreign country for purposes of 
                                obtaining approval for commercial 
                                distribution of the petition drug in 
                                the country.
                            ``(iii) Possible-nonequivalence claim.--In 
                        the case of a petition under subparagraph 
                        (C)(i) that makes a possible-nonequivalence 
                        claim:
                                    ``(I) Clauses (i) and (ii) of 
                                subparagraph (C) apply to the same 
                                extent and in the same manner as such 
                                clauses apply to a petition under 
                                subparagraph (B)(i) that makes a claim 
                                described in subclause (I) of such 
                                subparagraph.
                                    ``(II) If the Secretary determines 
                                that the petition drug is not 
                                bioequivalent to the U.S. label drug, 
                                the Secretary shall grant the petition 
                                and order that importation of the 
                                petition drug under subsection (a) 
                                cease.
                            ``(iv) Nonequivalence claim.--In the case 
                        of a petition under subparagraph (B)(i) that 
                        makes a nonequivalence claim:
                                    ``(I) Promptly after the petition 
                                is filed, the Secretary shall order 
                                that the importation of the petition 
                                drug involved cease during the period 
                                in which the petition is under review 
                                by the Secretary.
                                    ``(II) If the Secretary determines 
                                that the petition drug is not 
                                bioequivalent to the U.S. label drug, 
                                the Secretary shall grant the petition 
                                and provide that the order under 
                                subclause (I) remains in effect.
                            ``(v) Drugs approved on or after january 1, 
                        2004.--In the case of a petition under 
                        subparagraph (C)(i) that makes a possible-
                        nonequivalence claim or a nonequivalence claim, 
                        if the petition drug involved for commercial 
                        distribution was approved by the foreign 
                        government on or after January 1, 2004, or if 
                        the U.S. label drug was approved by the 
                        Secretary on or after such date:
                                    ``(I) The Secretary may not accept 
                                the petition for filing unless the 
                                person submitting the petition submits 
                                with the petition information 
                                demonstrating that--
                                            ``(aa) the difference 
                                        between the petition drug and 
                                        the U.S. label drug is due to a 
                                        difference between the legal 
                                        requirements for approval of 
                                        the drug in the foreign country 
                                        and for approval by the 
                                        Secretary; or
                                            ``(bb) the person has 
                                        submitted a supplemental 
                                        application to the government 
                                        of the foreign country, or to 
the Secretary, that will, if approved, remove the difference between 
the petition drug and the U.S. label drug.
                                    ``(II) If under clause (iii)(II) or 
                                (iv)(II) the Secretary has ordered that 
                                importation of the petition drug under 
                                subsection (a) cease, the Secretary 
                                shall rescind the order promptly after 
                                the approval of a supplemental 
                                application referred to in subclause 
                                (I)(bb) of this clause.
                            ``(vi) False statements.--The Secretary 
                        shall rescind an order under clause (iii)(II) 
                        or (iv)(II) promptly after determining that a 
                        materially false, fictitious, or fraudulent 
                        statement or representation in the petition 
                        involved was a material factor in the decision 
                        of the Secretary to grant the petition.
            ``(3) Labeling.--
                    ``(A) Importation by importer.--In the case of a 
                qualifying drug that under subsection (a)(2)(A) is 
                imported or offered for import with respect to an 
                importer, such drug shall be considered to be in 
                compliance with section 502 if the drug bears a copy of 
                the labeling approved for the drug under section 505, 
                without regard to whether the copy bears the trademark 
                involved. The Secretary shall provide such copy to the 
                registered exporter involved, upon request of the 
                exporter.
                    ``(B) Importation by individual.--In the case of a 
                qualifying drug that under subsection (a)(2)(B) is 
                imported or offered for import with respect to an 
                individual, such drug shall be considered to be in 
                compliance with section 502 if the drug bears a label 
                providing the directions for use by the consumer, and 
                bears a copy of any special labeling that would be 
                required by the Secretary had the drug been dispensed 
                by a pharmacist in the United States, without regard to 
                whether the special labeling bears the trademark 
                involved. The Secretary shall provide to the registered 
                exporter involved a copy of the special labeling, upon 
                request of the exporter.
    ``(h) Importers; Conditions for Importation.--
            ``(1) In general.--For purposes of subsection (a)(2)(A), 
        the importation of a qualifying drug by an importer is in 
        accordance with this subsection if the following conditions are 
        met:
                    ``(A) The importer, or a business organization of 
                which the importer is a part, takes delivery directly 
                from the mail, from a common carrier, or from a vehicle 
                or aircraft owned by the importer or such business 
                organization.
                    ``(B) From the port of entry for the drug to the 
                delivery of the drug to the importer or such business 
                organization--
                            ``(i) all transport of the drug was by one 
                        or more of the modes of transport specified in 
                        subparagraph (A); and
                            ``(ii) personnel of the transporting 
                        entities involved had exclusive custody of the 
                        drug, without the custodial involvement of any 
                        other type of entity, including a person in the 
                        business of the wholesale distribution of 
                        drugs.
            ``(2) Rule of construction.--Paragraph (1) may not be 
        construed as prohibiting a person in the business of the 
        wholesale distribution of drugs, or any other entity that is 
        not an importer, or a business organization referred to in 
        paragraph (1)(A), from negotiating the purchase price of 
        qualifying drugs from a registered exporter or from otherwise 
        being involved in the process of purchasing such drugs from 
        such exporters, if such person or other entity does not at any 
        point have custody of such drugs.
    ``(i) Personal Use; Conditions for Importation.--
            ``(1) In general.--For purposes of subsection (a)(2)(B), 
        the importation of a qualifying drug by an individual is in 
        accordance with this subsection if the following conditions are 
        met:
                    ``(A) The drug is accompanied by--
                            ``(i) a copy of a prescription for the 
                        drug, which prescription--
                                    ``(I) is valid under applicable 
                                Federal and State laws; and
                                    ``(II) was issued by a practitioner 
                                who, under the law of a State of which 
                                the individual is a resident, is 
                                authorized to administer prescription 
                                drugs; and
                            ``(ii) a statement that provides 
                        information sufficient for the Secretary to 
                        determine whether the prescription meets the 
                        requirement of clause (i), including with 
                        respect to the licensure of the practitioner 
                        who issued the prescription.
                    ``(B) With respect to the foreign country from 
                which the registered exporter involved dispensed the 
                drug, the drug is accompanied by a copy of the 
                documentation that was required under the law or 
                regulations of such country as a condition of 
                dispensing the drug to the individual.
                    ``(C) The copies referred to in subparagraphs 
                (A)(i) and (B) are marked in a manner sufficient--
                            ``(i) to indicate that the prescription, 
                        and the equivalent document in the foreign 
                        country involved, have been filled; and
                            ``(ii) to prevent a duplicative filling by 
                        another pharmacist.
                    ``(D) The quantity of the drug does not exceed a 
                90-day supply.
                    ``(E) The drug is not an ineligible subpart H drug. 
                For purposes of this section, a prescription drug is an 
                ineligible subpart H drug if the drug was approved by 
                the Secretary under subpart H of part 314 of title 21, 
                Code of Federal Regulations (relating to 
accelerated approval), with restrictions under section 520 of such part 
to assure safe use, and the Secretary has published in the Federal 
Register a notice that the Secretary has determined that good cause 
exists to prohibit the drug from being imported pursuant to this 
subsection.
            ``(2) Notice regarding personal entry.--A registration 
        condition is that the exporter involved agrees that, in 
        providing a qualifying drug to an individual under subsection 
        (a)(2)(B) in circumstances in which the drug will accompany the 
        individual as the individual enters the United States, the 
        exporter will notify the individual that the drug is authorized 
        to be imported under such subsection only if the shipping 
        container for the drug is intact and bears the marking affixed 
        under subsection (d)(2).
            ``(3) Presumption.--In the case of importation under this 
        subsection, for purposes of judicial and administrative 
        procedure, there is a presumption that a drug proposed for 
        export under subsection (a) is an approved drug under section 
        505(b)(1) if the criteria described in subsection (g)(A)(i) and 
        (ii) are met.
    ``(j) Standards for Refusing Admission.--A qualifying drug exported 
under subsection (a) from a registered exporter may be refused 
admission into the United States only if one or more of the following 
applies:
            ``(1) The shipping container for such drug does not bear 
        the markings required subsection (d)(2).
            ``(2) Such markings appear to be counterfeit.
            ``(3) The shipping container or markings appear to have 
        been tampered with.
            ``(4) The shipping container appears damaged in a way that 
        may affect the strength, quality, or purity of the drug.
            ``(5) After the shipment leaves the custody of the 
        registered exporter, the Secretary becomes aware that--
                    ``(A) the drug may be counterfeit;
                    ``(B) the drug may have been prepared, packed, or 
                held under insanitary conditions whereby it may have 
                been contaminated with filth; or
                    ``(C) the methods used in, or the facilities or 
                controls used for, the manufacturing, processing, 
                packing, or holding of the drug do not conform to good 
                manufacturing practice.
            ``(6) The Secretary has obtained an injunction under 
        section 302 that prohibits the distribution of the drug in 
        interstate commerce.
            ``(7) The Secretary has under section 505(e) withdrawn 
        approval of the drug.
            ``(8) The manufacturer of the drug has instituted a recall 
        of the drug.
    ``(k) Charitable Contributions.--Notwithstanding any other 
provision of this section, this section does not authorize the 
importation into the United States of a qualifying drug donated or 
otherwise supplied for free or at nominal cost by the manufacturer of 
the drug to a charitable or humanitarian organization, including the 
United Nations and affiliates, or to a government of a foreign 
country.''
    (b) Prohibited Acts.--The Federal Food, Drug, and Cosmetic Act, as 
amended by section 1121(b) of Public Law 108-173 (117 Stat. 2469), is 
amended--
            (1) in section 301 (21 U.S.C. 331), by amending paragraph 
        (aa) to read as follows:
    ``(aa)(1) The sale or trade by an importer, or by a business 
organization of which the importer is a part, of a qualifying drug that 
under section 804(a)(2)(A) was imported by the importer, other than--
            ``(A) a sale at retail made pursuant to dispensing the drug 
        to a customer of the importer or organization; or
            ``(B) a sale or trade of the drug to the registered 
        exporter from which the importer imported the drug.
    ``(2) The sale or trade by an individual of a qualifying drug that 
under section 804(a)(2)(B) was imported by the individual.
    ``(3) The knowing making of a materially false, fictitious, or 
fraudulent statement or representation in a petition under clause (i) 
of section 804(g)(2)(C). Such a petition that is not accepted for 
filing by reason of clause (iii) of such section shall be considered to 
contain such a statement or representation.''; and
            (2) in section 303(a) (21 U.S.C. 333(a)), by amending 
        paragraph (6) to read as follows:
    ``(6) Notwithstanding subsection (a), any person who violates 
section 301(aa)(3) shall be imprisoned not more than 10 years, or fined 
in accordance with title 18, United States Code, or both.''.
    (c) Civil Penalty.--
            (1) Technical amendments.--
                    (A) In general.--Section 303 of the Federal Food, 
                Drug, and Cosmetic Act (21 U.S.C. 333) is amended in 
                the last subsection by striking the subsection 
                designation and all that follows through ``Except as 
                provided'' in paragraph (1)(A) and inserting the 
                following:
    ``(f)(1)(A) Except as provided''.
                    (B) Certain acts.--The amendments made by the 
                following provisions of law are deemed to have been 
                made to subsection (f) of section 303 of the Federal 
                Food, Drug, and Cosmetic Act, as amended by 
                subparagraph (A) of this paragraph:
                            (i) section 407 of the Food Quality 
                        Protection Act of 1996 (110 Stat. 1535); and
                            (ii) section 201(c) of the Medical Device 
                        User Fee and Modernization Act of 2002 (116 
                        Stat. 1609).
            (2) Civil penalties.--
                    (A) In general.--Section 303 of the Federal Food, 
                Drug, and Cosmetic Act (21 U.S.C. 333), as amended by 
                paragraph (1) of this subsection, is amended in 
                subsection (f)--
                            (i) by redesignating paragraphs (3) through 
                        (5) as paragraphs (4) through (6), 
                        respectively; and
                            (ii) by inserting after paragraph (2) the 
                        following paragraph:
            ``(3) Any person who knowingly violates section 301(aa)(3) 
        and whose statement or representation described in such section 
        was a material factor in the decision of the Secretary to issue 
        an order under clause (iii)(II) or (iv)(II) of section 
        804(g)(2)(E) shall be liable to the United States for a civil 
        penalty in an amount not to exceed a reasonable estimate of the 
        gross revenue that, pursuant to section 804, would have been 
        collected by the register exporter involved for sales of the 
        qualifying drug involved to importers and individuals in the 
        United States during the period for which the order was in 
        effect.''.
                    (B) Conforming amendments.--Section 303(f) of the 
                Federal Food, Drug, and Cosmetic Act, as amended by 
                subparagraph (A), is amended--
                            (i) in paragraph 5 (as redesignated) by 
                        striking ``paragraph (3)(A)'' and inserting 
                        ``paragraph (4)(A)''; and
                            (ii) in paragraph 6 (as redesignated) by 
                        striking ``paragraph (4)'' each place it 
                        appears and inserting ``paragraph (5)''.
    (d) Implementation.--
            (1) Rulemaking.--Not later than 90 days after the date of 
        the enactment of this Act, the Secretary of Health and Human 
        Services shall promulgate an interim final rule for 
        implementing section 804 of the Federal Food, Drug, and 
        Cosmetic Act, as added by subsection (a) of this section. Such 
        rule shall be developed and promulgated by the Secretary 
        without providing general notice of proposed rulemaking, and 
        the rule may be made effective immediately upon promulgation of 
        the rule. Not later than one year after the date on which the 
        interim final rule is promulgated, the Secretary shall, in 
        accordance with procedures under section 553 of title 5, United 
        States Code, promulgate a final rule for implementing such 
        section 804, which may incorporate by reference provisions of 
        the interim final rule, to the extent that such provisions are 
        not modified.
            (2) Personal importation from canada.--Until the expiration 
        of the 45-day period beginning on the date on which the interim 
        final rule under paragraph (1)(A) is promulgated, an individual 
        may import a prescription drug from Canada for personal use or 
        for the use of a family member of the individual (rather than 
        for resale), subject to compliance with each of the following 
        conditions:
                    (A) The drug is not--
                            (i) a controlled substance, as defined in 
                        section 102 of the Controlled Substances Act;
                            (ii) a biological product, as defined in 
                        section 351 of the Public Health Service Act;
                            (iii) an infused drug, including a 
                        peritoneal dialysis solution;
                            (iv) an intravenously injected drug;
                            (v) a drug that is inhaled during surgery; 
                        or
                            (vi) a drug approved by the Secretary under 
                        subpart H of part 314 of title 21, Code of 
                        Federal Regulations (relating to accelerated 
                        approval) with restrictions under section 520 
                        of such part to assure safe use.
                    (B) The drug is dispensed by a person licensed in 
                Canada to dispense such drugs.
                    (C) The drug is accompanied by a copy of the 
                prescription for the drug, which prescription--
                            (i) is valid under applicable Federal and 
                        State laws; and
                            (ii) was issued by a practitioner who, 
                        under the law of a State of which the 
                        individual is a resident, is authorized to 
                        administer prescription drugs.
                    (D) The drug is accompanied by a copy of the 
                document that was required in Canada as a condition of 
                dispensing the drug to the individual.
                    (E) The copies referred to in subparagraphs (C) and 
                (D) are marked in a manner sufficient--
                            (i) to indicate that the prescription, and 
                        the equivalent document in Canada, have been 
                        filled; and
                            (ii) to prevent a duplicative filling by 
                        another pharmacist.
                    (F) The quantity of the drug does not exceed a 90-
                day supply.
    (e) Amendment of Certain Provision.--Section 801(g) of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 381) is amended--
            (1) in the matter preceding clause (i), by striking ``With 
        respect to'' and all that follows through ``may not send'' and 
        inserting the following: ``With respect to a qualifying drug 
        that is imported or offered for import in the United States by 
        an individual pursuant to section 804(a)(2)(B), the Secretary 
        may not send'';
            (2) by redesignating clause (iv) as clause (v);
            (3) in clause (iii), by striking ``or'' at the end; and
            (4) by inserting after clause (iii) the following:
                    ``(iv) importation is not in accordance with 
                section 804; or''.

SEC. 4. ADDITIONAL WAIVERS REGARDING PERSONAL IMPORTATION; ENFORCEMENT 
              POLICIES OF SECRETARY.

    (a) In General.--Section 801 of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 381) is amended by adding at the end the 
following subsections:
    ``(p)(1) Waivers under this subsection are in addition to, and 
independent of, the waiver pursuant to section 804(a)(2)(B).
    ``(2) With respect to the standards referred to in subsection 
(d)(1), the Secretary may establish by regulation a waiver of such 
standards in the case of the importation by an individual of a drug 
into the United States in the following circumstances:
            ``(A) The drug was dispensed to the individual while the 
        individual was in the United States, the drug was dispensed by 
a pharmacist or by a practitioner licensed by law to administer the 
drug, and the individual traveled from the United States with the drug.
            ``(B) The individual is entering the United States and the 
        drug accompanies the individual at the time of entry.
            ``(C) The drug does not appear to the Secretary to be 
        adulterated.
            ``(D) The quantity of the drug does not exceed a 30-day 
        supply.
            ``(E) The drug is accompanied by a statement that the 
        individual seeks to import the drug into the United States 
        under a personal importation waiver.
            ``(F) The importation complies with such additional 
        standards as the Secretary determines to be appropriate to 
        protect the public health.
    ``(3) With respect to the standards referred to in subsections (a) 
and (d)(1), the Secretary may establish by regulation a waiver of such 
standards in the case of the importation by an individual of a drug 
into the United States in the following circumstances:
            ``(A) The drug was dispensed to the individual while the 
        individual was in a foreign country, and the drug was dispensed 
        in accordance with the laws and regulations of such country.
            ``(B) The individual is entering the United States and the 
        drug accompanies the individual at the time of entry.
            ``(C) The drug is approved for commercial distribution in 
        the foreign country in which the drug was obtained.
            ``(D) The drug does not appear to the Secretary to be 
        adulterated.
            ``(E) The quantity of the drug does not exceed a 10-day 
        supply.
            ``(F) The drug is accompanied by a statement that the 
        individual seeks to import the drug into the United States 
        under a personal importation waiver.
            ``(G) The importation complies with such additional 
        standards as the Secretary determines to be appropriate to 
        protect the public health.
    ``(q) The Secretary may not administer any enforcement policy that 
has the effect of permitting the importation of a prescription drug 
into the United States in violation of this Act or section 351 of the 
Public Health Service Act.''.
    (b) Additional Waiver.--This Act and the amendments made by this 
Act shall not be construed as limiting the authority of the Secretary 
of Health and Human Services to establish a waiver of the standards 
referred to in section 801(a) of the Federal Food, Drug, and Cosmetic 
Act with respect to the importation by an individual of a drug into the 
United States that does not meet such standards, provided that such 
waiver is no more permissive than the guidance, as in effect on January 
1, 2004, that is provided in the item numbered 2 (relating to a 
specific situation, consisting of conditions (a) through (d)) under the 
heading ``Drugs, Biologics, and Devices'' in chapter 9 of the FDA/ORA 
Regulatory Procedures Manual (relating to import operations/actions), 
in the subchapter relating to coverage of personal importations.

SEC. 5. DISPOSITION OF CERTAIN DRUGS DENIED ADMISSION INTO UNITED 
              STATES.

    (a) In General.--Chapter VIII of the Federal Food, Drug, and 
Cosmetic Act, as amended by section 3 of this Act, is amended by adding 
at the end the following section:

``SEC. 805. DISPOSITION OF CERTAIN DRUGS DENIED ADMISSION.

    ``(a) In General.--A shipment of drugs that is imported or offered 
for import into the United States shall be refused admission if the 
shipment has a declared value of less than $10,000 and the drugs are in 
violation of any standard referred to in section 801(a) or 801(d)(1), 
including any drugs imported or offered for import under enforcement 
policies prohibited under section 801(q).
    ``(b) Importation Under Section 804.--In the case of a drug that 
under section 804 is imported or offered for import from a registered 
exporter, the reference in subsection (a) to standards referred to in 
section 801(a) or 801(d)(1) shall be considered a reference to 
standards referred to in section 804(j).
    ``(c) Destruction of Violative Shipments.--Drugs refused admission 
under subsection (a) or (b) shall be destroyed, subject to subsection 
(e). Section 801(b) does not authorize the delivery of the drugs 
pursuant to the execution of a bond, and the drugs may not be exported.
    ``(d) Certain Procedures.--
            ``(1) In general.--The refusal of admission and destruction 
        of drugs under this section may be carried out without notice 
        to the importer, owner, or consignee of the drugs. The issuance 
        of receipts for the drugs, and recordkeeping activities 
        regarding the drugs, may be carried out on a summary basis.
            ``(2) Objective of procedures.--Procedures promulgated 
        under paragraph (1) shall be designed toward the objective of 
        ensuring that, with respect to efficiently utilizing Federal 
        resources available for carrying out this section, a 
        substantial majority of shipments of drugs subject to 
        subsection (a) or (b) are identified and refused admission and 
        destroyed.
    ``(e) Evidence Exception.--Drugs may not be destroyed under 
subsection (c) to the extent that the Attorney General of the United 
States determines that the drugs should be preserved as evidence or 
potential evidence with respect to an offense against the United 
States.
    ``(f) Rule of Construction.--This section may not be construed as 
having any legal effect on applicable law with respect to a shipment of 
drugs that is imported or offered for import into the United States and 
has a declared value equal to or greater than $10,000.
    ``(g) Administration.--This section may be not be construed as 
transferring to the Secretary responsibility for carrying out this 
section.''.
    (b) Procedures.--Procedures for carrying out section 805 of the 
Federal Food, Drug, and Cosmetic Act, as added by subsection (a) of 
this subsection, shall be established not later than 30 days after the 
date of the enactment of this Act.

SEC. 6. CIVIL ACTIONS REGARDING PROPERTY.

     Section 303 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
333) is amended by adding at the end the following subsection:
    ``(g)(1) If a person is alienating or disposing of property, or 
intends to alienate or dispose of property, that is obtained as a 
result of or is traceable to a drug imported in violation of subsection 
(a) or (d) of section 801 or section 804, the Attorney General may 
commence a civil action in any Federal court--
            ``(A) to enjoin such alienation or disposition of property; 
        or
            ``(B) for a restraining order to--
                    ``(i) prohibit any person from withdrawing, 
                transferring, removing, dissipating, or disposing of 
                any such property or property of equivalent value; and
                    ``(ii) appoint a temporary receiver to administer 
                such restraining order.
    ``(2) Proceedings under paragraph (1) shall be carried out in the 
same manner as applies under section 1345 of title 18, United States 
Code.''.

SEC. 7. WHOLESALE DISTRIBUTION OF DRUGS; STATEMENTS REGARDING PRIOR 
              SALE, PURCHASE, OR TRADE.

    (a) Striking of Exemptions; Applicability to Registered 
Exporters.--Section 503(e) of the Federal Food, Drug, and Cosmetic Act 
(21 U.S.C. 353(e)) is amended--
            (1) in paragraph (1)--
                    (A) by striking ``and who is not the manufacturer 
                or an authorized distributor of record of such drug'' 
                and inserting ``, other than a registered exporter 
                under section 804,'';
                    (B) by striking ``to an authorized distributor of 
                record or''; and
                    (C) by striking subparagraph (B) and inserting the 
                following subparagraphs:
    ``(B) The fact that a drug subject to subsection (b) is exported 
from the United States does not with respect to such drug exempt any 
person who is engaged in the business of the wholesale distribution of 
the drug from providing the statement described in subparagraph (A) to 
the person who receives the drug pursuant to the export of the drug.
    ``(C) (i) The Secretary may by regulation establish requirements 
that supersede subparagraph (A) (referred to in this subparagraph as 
`alternative requirements') to identify the chain of custody of a drug 
subject to subsection (b) from the manufacturer of the drug throughout 
the wholesale distribution of the drug to an importer who intends to 
sell the drug at retail if the Secretary determines that the 
alternative requirements will identify such chain of custody or the 
identity of the drug with greater certainty than the requirements of 
subparagraph (A), and that the alternative requirements are 
economically and technically feasible.
    ``(ii) If the Secretary promulgates a final rule to establish such 
alternative requirements, the final rule in addition shall, with 
respect to the registration condition established in clause (i) of 
section 804(c)(3)(B), establish a condition equivalent to the 
alternative requirements, and such equivalent condition supersedes such 
clause (i).'';
            (2) in paragraph (2)(A), by adding at the end the 
        following: ``The preceding sentence may not be construed as 
        having any applicability with respect to a registered exporter 
        under section 804.''; and
            (3) in paragraph (3), by striking ``and subsection (d)--'' 
        in the matter preceding subparagraph (A) and all that follows 
        through ``the term `wholesale distribution' means'' in 
        subparagraph (B) and inserting the following: ``and subsection 
        (d), the term `wholesale distribution' means''.
    (b) Conforming Amendment.--Section 503(d) of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 353(d)) is amended by adding at the 
end the following paragraphs:
    ``(4) Each manufacturer of a drug subject to subsection (b) shall 
maintain at its corporate offices a current list of the authorized 
distributors of record of such drug.
    ``(5) For purposes of this subsection, the term `authorized 
distributors of record' means those distributors with whom a 
manufacturer has established an ongoing relationship to distribute such 
manufacturer's products.''.

SEC. 8. REPEAL OF IMPORTATION EXEMPTION UNDER CONTROLLED SUBSTANCES 
              IMPORT AND EXPORT ACT.

    Section 1006 of the Controlled Substances Import and Export Act (21 
U.S.C. 956) is repealed.

SEC. 9. ENFORCEMENT THROUGH DENIAL OF DEDUCTION FOR CERTAIN ADVERTISING 
              EXPENSES.

    (a) In General.--Part IX of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to items not deductible) is 
amended by adding at the end the following new section:

``SEC. 280L. ADVERTISING EXPENDITURES OF TAXPAYERS WHO DISCRIMINATE 
              AGAINST FOREIGN SELLERS OF PRESCRIPTION DRUGS TO DOMESTIC 
              CONSUMERS.

    ``(a) In General.--No deduction otherwise allowable under this 
chapter shall be allowed for any amount paid or incurred for 
advertising for the taxable year by any taxpayer unless the taxpayer 
certifies that the taxpayer has not taken any action, directly or 
indirectly, during such taxable year to prevent the authorized 
importation of a qualifying drug into the United States from a 
registered exporter to a pharmacy or individual pursuant to section 
804(a) of the Federal Food, Drug, and Cosmetic Act or has otherwise 
conditioned the terms by which a qualifying drug is imported into the 
United States from a registered exporter under such section. Such 
certification shall be made in such manner as the Secretary determines 
and shall be accompanied by such fees as the Secretary determines 
necessary to cover the costs of confirming such certification.
    ``(b) Advertising.--For purposes of this section, the term 
`advertising' includes direct to consumer advertising and any activity 
designed to promote the use of a prescription drug directed to 
providers or others who may make decisions about the use of 
prescription drugs (other than the provision of free samples).''.
    (b) Clerical Amendment.--The table of sections for part IX of 
subchapter B of chapter 1 of such Code is amended by adding at the end 
thereof the following new item:

``Sec. 280L. Advertising expenditures of taxpayers who discriminate 
                            against foreign sellers of prescription 
                            drugs to domestic consumers.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 10. COMPLIANCE THROUGH ALLOWANCE OF RESEARCH AND DEVELOPMENT TAX 
              CREDIT.

    (a) In General.--Section 41 of the Internal Revenue Code of 1986 
(relating to credit for increasing research activities) is amended by 
adding at the end the following new subsection:
    ``(i) Increase in Credit for Certain Taxpayers.--The amount of the 
credit otherwise determined under this section for any taxable year 
shall be increased by 20 percent if the taxpayer certifies that the 
taxpayer has not taken any action, directly or indirectly, during such 
taxable year to prevent the authorized importation of a qualifying drug 
into the United States from a registered exporter to a pharmacy or 
individual pursuant to section 804(a) of the Federal Food, Drug, and 
Cosmetic Act or has otherwise conditioned the terms by which a 
qualifying drug is imported into the United States from a registered 
exporter under such section. Such certification shall be made in such 
manner as the Secretary determines and shall be accompanied by such 
fees as the Secretary determines necessary to cover the costs of 
confirming such certification.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.
                                 <all>